If all firms in the industry have similar demand, marginal revenue, and cost curves as the firm in the figure above, in the long run
A) nothing changes.
B) some firms exit the industry and the economic losses of the remaining firms decrease.
C) some firms exit the industry and the economic profits of the remaining firms increase.
D) new firms enter the industry and the economic losses of the original firms decrease.
E) new firms enter the industry and the economic profits of the original firms increase.
B
You might also like to view...
Which of the following is the largest expenditure item of state governments?
A. Education B. Highways C. Public welfare D. Health and hospitals
If a firm in a perfectly competitive market faces a market price of $8, and it decides to increase its production from 300 units to 550 units, the firm's total revenue will:
A. increase from $2,400 to $4,400. B. decrease from $4,400 to $2,400. C. stay the same at $8. D. likely rise, but it cannot be determined by how much.